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on South East Asia |
| By: | Girardin, Eric (Asian Development Bank Institute) |
| Abstract: | Pegging in a coordinated way to a regional basket currency is considered by many as optimal for east-Asian countries. By contrast, according to existing empirical studies, these countries have most often relied on non-cooperative United States dollar or G3 pegs. We show for the first time that by the late 1990s, with some reversals, a majority of east-Asian countries had already moved, de facto, away from the dollar peg and started targeting a basket, including east-Asian currencies (an “Asian Currency Unit”). Common-shock or market-based interpretations of such moves are ruled out since we document that, with few exceptions, countries in the region have in reality stuck to fixed exchange rates. We obtain such results using a Markov-switching estimation benchmarked against Bai-Perron structural break tests for the synthesis model of Frankel and Wei (2007), which augments the inference about currency weights in a basket with the weight on exchange-market pressure. In order to measure the latter, the forward positions of central banks in the foreign exchange market are taken into account. |
| Keywords: | asian currency unit; east asian currencies; exchange rate regimes |
| JEL: | F31 F41 |
| Date: | 2011–01–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0262&r=sea |
| By: | Raghav Gaiha; Katsushi S. Imai; Ganesh Thapa |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:man:sespap:1104&r=sea |
| By: | Zhang, ZhongXiang (Asian Development Bank Institute) |
| Abstract: | While bringing positive impacts and benefits, cross-border infrastructure projects face additional challenges relative to national projects. Moreover, such projects involve a variety of technical, regulatory, institutional, and legal factors, and their obstacles constrain the development of cross-border infrastructure projects. This paper argues that proper technical specifications and well-functioning regulatory, institutional and legislative/legal frameworks with clearer lines of oversight are crucial to getting such projects off the ground in the first place and to ensure that they operate properly and reliably while minimizing their environmental impacts. It is pointed out that many issues in theses areas need to be addressed at the national level. The paper concludes that such domestic efforts, coupled with regional frameworks and arrangements wherever necessary, will promote the further development of cross-border infrastructure projects. |
| Keywords: | asia cross-border infrastructure; environmental impact; asia regional integration |
| JEL: | O13 Q01 Q43 Q48 Q53 Q54 Q56 Q58 R48 |
| Date: | 2011–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0261&r=sea |
| By: | Solenn Leplay; Jonah Busch; Philippe Delacote; Sophie Thoyer |
| Abstract: | This paper develops an analytical model of a REDD+ mechanism with an international payment tier and a national payment tier, and calibrate land users' opportunity cost curves based on data from Sumatra. We compare the avoided deforestation and cost-eciency of government purchases across the two types of contracts fixed price and opportunity cost, and across two government types "benevolent" and "budget maximizing". Our paper shows that a fixed-price scheme is likely to be more efficient than an opportunity-cost compensation scheme at low international carbon prices, when the government is "benevolent" or when variation in opportunity cost within land users is high relative to variation in opportunity cost across land users. Thus, a PES program which pays local communities or land users based on the value of the service provided by avoided deforestation may not only distribute REDD revenue more equitably than an opportunity cost-based payment system, but may be more cost-efficient as well. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:02-11&r=sea |
| By: | Xiaohu Wang (Singapore Management University); Peter C.B. Phillips (Cowles Foundation, Yale University); Jun Yu (Singapore Management University) |
| Abstract: | Multivariate continuous time models are now widely used in economics and finance. Empirical applications typically rely on some process of discretization so that the system may be estimated with discrete data. This paper introduces a framework for discretizing linear multivariate continuous time systems that includes the commonly used Euler and trapezoidal approximations as special cases and leads to a general class of estimators for the mean reversion matrix. Asymptotic distributions and bias formulae are obtained for estimates of the mean reversion parameter. Explicit expressions are given for the discretization bias and its relationship to estimation bias in both multivariate and in univariate settings. In the univariate context, we compare the performance of the two approximation methods relative to exact maximum likelihood (ML) in terms of bias and variance for the Vasicek process. The bias and the variance of the Euler method are found to be smaller than the trapezoidal method, which are in turn smaller than those of exact ML. Simulations suggest that when the mean reversion is slow the approximation methods work better than ML, the bias formulae are accurate, and for scalar models the estimates obtained from the two approximate methods have smaller bias and variance than exact ML. For the square root process, the Euler method outperforms the Nowman method in terms of both bias and variance. Simulation evidence indicates that the Euler method has smaller bias and variance than exact ML, Nowman's method and the Milstein method. |
| Keywords: | Bias, Diffusion, Euler approximation, Trapezoidal approximation, Milstein approximation |
| JEL: | C15 G12 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1778&r=sea |
| By: | Tomohiro Machikita (Institute of Developing Economies (IDE/JETRO), Japan); Chi Binh Truong Thi (Institute for Industry Policy and Strategy, Vietnam); Yasushi Ueki (Bangkok Research Center, IDE/JETRO, Thailand) |
| Abstract: | Increasing wages in coastal areas and the risk of Yuan appreciation in China will encourage firms in China to adopt China plus One strategy. More firms establish plants in Vietnam to take advantage of supporting industries in China and hedge China risk. Hanoi and its surrounding region will be one of the main destinations for FDIs into manufacturing sectors. Although Vietnam can provide cheap labor forces, firms in Vietnam do not have sufficient technological and managerial capabilities to participate in international production networks. International technology transfer is needed for Vietnam to achieve international business standards. This paper presents firm-level evidence on process innovation through technology transfer to firms in Hanoi. We emphasize engineer exchanges as a channel of technology transfer. A case study of Japanese firm invested from China to establish a plant in Hanoi is also introduced to complement the empirical result. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dpc:wpaper:1711&r=sea |
| By: | Hooi Hooi Lean (School of Social Sciences, Universiti Sains Malaysia); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University); Wing-Keung Wong (Department of Economics, Hong Kong Baptist University) |
| Abstract: | This paper examines investor preferences for oil spot and futures based on mean-variance (MV) and stochastic dominance (SD). The mean-variance criterion cannot distinct the preferences of spot and market whereas SD tests leads to the conclusion that spot dominates futures in the downside risk while futures dominate spot in the upside profit. It is also found that risk-averse investors prefer investing in the spot index, whereas risk seekers are attracted to the futures index to maximize their expected utilities. In addition, the SD results suggest that there is no arbitrage opportunity between these two markets. Market efficiency and market rationality are likely to hold in the oil spot and futures markets. |
| Keywords: | Stochastic dominance, risk averter, risk seeker, futures market, spot market. |
| JEL: | C14 G12 G15 |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:755&r=sea |